New Zealand keenly awaits outcome of Anadarko's exploratory drilling

Singapore (Platts)--9 Oct 2013 124 am EDT/524 GMT

New Zealand will be keenly watching the outcome of Anadarko Petroleum's exploratory drilling of two wells in the deep waters of the Taranaki and Canterbury basins, which, if successful, could set the country on a new oil and gas exploration path.

"This is really a tipping point for us. If we go through this drilling season with success, especially outside Taranaki, I will have a very big smile on my face," Kevin Rollens, director at New Zealand's Ministry of Business, Innovation and Employment, said last week.

The MBIE oversees the country's minerals and petroleum sector.

"But if these come up unsuccessful, New Zealand will be a very difficult sell and I will be the first one to admit that," Rollens said Thursday at the 19th Asia Oil Week upstream conference in Singapore.

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Anadarko is scheduled to start drilling work on two blocks -- one in the Taranaki Basin and one in the Canterbury basin -- in mid-November, Rollens said.

MAKING PUSH TO ATTRACT COMPANIES

New Zealand has over the last couple of years made a big push to attract international companies to explore oil and gas in its large unexplored basins.

The country offered 23 blocks in its 2012 Block Offer spanning a total area of 40,000 sq km (15,200 sq miles). Of these, 10 permits were awarded to companies including Shell, OMV, and Anadarko.

In 2013, the country put on offer 190,000 sq km of offshore area.

"This year we moved to what is an offshore release area. The advantage of the offshore release area is that instead of someone in my shop trying to define your permit area, you can now define your permit area," Rollens said.

"So, that creates some flexibility for operators who are looking for certain plays and certain sizes of blocks," he said.

"We have received a number of bids in the 2013 round and we will be making announcements in December this year."

For the 2014 block offer, the government plans to open up 434,000 sq km of offshore release area, he said.

New Zealand has a very a large estate -- 6 million sq km in total with a very large continental shelf that has seen very little exploration work. All the country's production comes from 10,000 sq km, all located in the Taranaki Basin -- both onshore and offshore.

"We have roughly 160,000 sq km under permit and have intentions to have a lot more as we pull up the modern block offer process," he said.

"We think there are other sedimentary basins that also deserve a good look."

Rollens said that New Zealand is looking for companies with a compelling work program and very high standards, but the government would not get involved at any stage of the project.

"We are going to have a very 'light touch' provided you work to very high standards," he said.